Monday, June 08, 2020

Global Crisis: the Convergence of Marx, Kafka, Orwell and Huxley

The global crisis is not merely economic; it is the result of profound financial, sociological and political trends described by Marx, Kafka, Orwell and Huxley.
The unfolding global crisis is best understood as the convergence of the dynamics described by Marx, Kafka, Orwell and Huxley. Let's start with Franz Kafka, the writer (1883-1924) who most eloquently captured the systemic injustices of all-powerful bureaucratic institutions--the alienation experienced by the hapless citizen enmeshed in the bureaucratic web, petty officialdom's mindless persecutions of the innocent, and the intrinsic absurdity of the centralized State best expressed in this phrase: "We expect errors, not justice."
If this isn't the most insightful summary of the current moment in history, then what is? A lawyer by training and practice, Kafka understood that the the more powerful and entrenched the institution and its bureaucracy, the greater the collateral damage rained on the innocent, and the more extreme the perversion of justice.
We are living in a Kafkaesque nightmare where suspicion alone justifies the government stealing from its citizens, and an unrelated crime (possessing drug paraphernalia) is used to justify state theft.
As in a Kafkaesque nightmare, the state is above the law when it needs an excuse to steal your car or cash. There is no crime, no arrest, no due process--just the state threatening that you should shut up and be happy they don't take everything you own.
All these forms of civil forfeiture are well documented. While some would claim the worst abuses have been rectified, that is far from evident. What is evident is how long these kinds of legalized looting have been going on.
Stop and Seize (six parts) (2013)
When the state steals our cash or car on mere suspicion, you have no recourse other than horrendously costly and time-consuming legal actions. So you no longer have enough money to prove your innocence now that we've declared your car and cash guilty?
Tough luck, bucko--be glad you live in a fake democracy with a fake rule of law, a fake judiciary, and a government with the officially sanctioned right to steal your money and possessions without any due process or court proceedings--legalized looting.
They don't have to torture a confession out of you, like the NKVD/KGB did in the former Soviet Union, because your cash and car are already guilty.
This is where Orwell enters the convergence, for the State masks its stripmining and power grab with deliciously Orwellian misdirections such as "the People's Party," "democratic socialism," and so on.
Orwell understood the State's ontological imperative is expansion, to the point where it controls every level of community, markets and society. Once the State escapes the control of the citizenry, it is free to exploit them in a parasitic predation that is the mirror-image of Monopoly capital. For what is the State but a monopoly of force, coercion, data manipulation and the regulation of private monopolies?
What is the EU bureaucracy in Brussels but the perfection of a stateless State?
As Kafka divined, centralized bureaucracy has the capacity for both Orwellian obfuscation (anyone read those 1,300-page Congressional bills other than those gaming the system for their private benefit?) and systemic avarice and injustice.
The convergence boils down to this: it would be impossible to loot this much wealth if the State didn't exist to enforce the "rules" of parasitic predation.
Aldous Huxley foresaw a Central State that persuaded its people to "love their servitude" via propaganda, drugs, entertainment and information-overload. In his view, the energy required to force compliance exceeded the "cost" of persuasion, and thus the Powers That Be would opt for the power of suggestion.
He outlined this in a letter to George Orwell:
"My own belief is that the ruling oligarchy will find less arduous and wasteful ways of governing and of satisfying its lust for power, and these ways will resemble those which I described in Brave New World.
Within the next generation I believe that the world's rulers will discover that infant conditioning and narco-hypnosis are more efficient, as instruments of government, than clubs and prisons, and that the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging and kicking them into obedience."
As prescient as he was, Huxley could not have foreseen the power of mobile telephony, gaming and social media hypnosis/addiction as a conditioning mechanism for passivity and self-absorption. We are only beginning to understand the immense addictive/conditioning powers of 24/7 mobile telephony / social media.
What would we say about a drug that caused people to forego sex to check their Facebook page? What would we say about a drug that caused young men to stay glued to a computer for 40+ hours straight, an obsession so acute that some actually die? We would declare that drug to be far too powerful and dangerous to be widely available, yet mobile telephony, gaming and social media is now ubiquitous.
Servitude comes in many gradations and forms. Relying on the Federal Reserve to constantly prop up our pension and mutual funds lest reality cause them to collapse is a form of servitude; we end up worshiping the Fed as our omnipotent financial saviors.
That the Fed is unelected and impervious to democracy or the will of the people is forgotten; all that matters is that we love our servitude to it.
The Central State has the power via helicopter drops of cash to individuals and corporate bailouts to buy complicity. Since the human mind rebels against hypocrisy and insincerity--we can all spot a phony--we subconsciously persuade ourselves of the rightness and inevitability of servitude and self-absorption.
And that is how we come to love our servitude; we persuade ourselves to believe it's acceptable and normal rather than deranged and destructive.
Last but not least, we come to Marx. As Marx explained, the dynamics of state-monopoly-capitalism lead to the complete dominance of capital over labor in both financial and political "markets," as wealth buys political influence which then protects and enforces capital's dominance.
Marx also saw that finance-capital would inevitably incentivize over-capacity, stripping industrial capital of pricing power and profits. Once there's more goods and services than labor can afford to buy with earnings, financialization arises to provide credit to labor to buy capital's surplus production and engineer financial gains with leveraged speculation and asset bubbles.
But since labor's earnings are stagnant or declining, there's an end-game to financialization. Capital can no longer generate any gain at all except by central banks agreeing to buy capital's absurdly over-valued assets. Though the players tell themselves this arrangement is temporary, the dynamics Marx described are fundamental and inexorable: the insanity of central banks creating currency out of thin air to buy insanely over-priced assets is the final crisis of late-stage capitalism because there is no other escape from collapse.
Having stripped labor of earnings and political power and extracted every last scrap of profit from over-capacity (i.e. globalization) and financialization, capital is now completely dependent on money-spewing central banks buying their phantom capital with newly printed currency, a dynamic that will eventually trigger a collapse in the purchasing power of the central banks' phantom capital (i.e. fiat currencies).
When there is no incentive to invest in real-world productive assets and every incentive to skim profits by front-running the Federal Reserve, capitalism is dead. Paraphrasing Wallerstein, "Capitalism is no longer attractive to capitalists."
We can see this for ourselves in the real world: if "renewable energy" was as profitable as some maintain, private capital would have rushed in to fund every project to maximize their gains from this new source of immense profits. But as Art Berman explained in Why the Renewable Rocket Has Failed To Launch, this hasn't been the case. Rather, "green energy" remains dependent on government subsidies in one form or another. If hydropower is removed from "renewables," all other renewables (solar, wind, etc.) provide only 4% of total global energy consumption.
Japan's stagnation exemplifies Marx's analysis: Japan's central bank has created trillions of yen out of thin air for 30 years and used this phantom capital to buy the over-valued assets of Japan's politically dominant state-capitalist class, a policy that has led to secular stagnation and social decline. If it weren't for China's one-off expansion, Japan's economy would have slipped into phantom capital oblivion decades ago.
Kafka, Orwell, Huxley and Marx called it, and we're living in the last-gasp stage of the cruel and unsustainable system they described. So sorry, but investing your phantom capital in FANG stocks, Tik-Tok and virtual-reality games will not save phantom capital from well-deserved oblivion.
Recent Podcasts:
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

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